The viral Gag proteins control many aspects of the HIV-1 replication cycle. The Gag precursor drives the assembly of virus particles in the infected cell, and, through putative interactions with the transmembrane envelope (Env) glycoprotein gp41, directs Env incorporation into virus particles. Following infection, the Gag proteins play a central role in uncoating and assist in the reverse transcription process. The HIV-1 assembly and release pathway begins with the targeting of the Gag precursor to the site of virus assembly. The molecular mechanism by which Gag is targeted to the appropriate subcellular location remains poorly understood. Based on the analysis of mutant Gag proteins, we and others have previously demonstrated that a highly basic patch in the matrix (MA) domain of Gag is a major determinant of Gag transport to the plasma membrane. This year (Ono and Freed, submitted) we determined that, in HeLa cells, the MA mutant Gags that are defective in plasma membrane targeting form virus particles in a CD63-positive compartment, defined as the late endosome or multivesicular body (MVB). Interestingly, we find that, in primary human macrophages, both wild type (WT) and MA mutant Gag proteins are targeted specifically to the MVB. Despite the fact that particle assembly in macrophages occurs at an intracellular site rather than at the plasma membrane, we observe that WT Gag expressed in this cell type is released as extracellular virions with high efficiency. These results demonstrate that Gag targeting to, and assembly in, the MVB are physiologically important steps in HIV-1 virus particle production in macrophages, and that particle release in this cell type may follow an exosomal pathway. To determine whether Gag targeting to the MVB is the result of an interaction between the late domain in p6Gag and MVB sorting machinery (e.g., TSG101), we examined the targeting and assembly of Gag mutants lacking p6. Significantly, the MVB localization of Gag was still observed in the absence of p6 suggesting that an interaction between Gag and TSG101 is not required for Gag targeting to the MVB. These data are consistent with a model for Gag targeting that postulates two different cellular binding partners for Gag, one on the plasma membrane and the other in the MVB. Recent studies have suggested that the PM contains microdomains with distinct protein and lipid compositions. One type of microdomain, the lipid raft, is enriched in sphingolipids and cholesterol and can be isolated as detergent-resistant membrane (DRM). Rafts have been shown to play essential roles in a variety of biological processes, often by acting as a target site for proteins involved in a common pathway. Two years ago, we reported that a large portion of membrane-bound Gag was recovered in DRM (Ono and Freed, PNAS, 2001). Recent work has been aimed at defining the mechanism by which raft disruption impairs virus production. These results of this analysis suggests that cholesterol depletion prevents the efficient binding of Gag to membrane. The p6 domain of HIV-1 is located at the C-terminus of the Gag precursor protein Pr55Gag. Previous studies indicated that p6 plays a critical role in HIV-1 particle budding from virus-expressing HeLa cells. Recently, it was demonstrated that the product of tumor susceptibility gene 101 (TSG101), which contains at its N-terminus a domain highly related to ubiquitin conjugating (E2) enzymes, binds HIV-1 Gag in a p6-dependent fashion. We examined the impact of overexpressing the N-terminal region of TSG101 on HIV-1 particle production. Intriguingly, we observe that this domain (referred to as TSG-5') potently inhibits virus production (Demirov et al., PNAS 2002). Examination of cells coexpressing HIV-1 Gag and TSG-5' by electron microscopy reveals a defect in virus budding very reminiscent of that observed with p6 L domain mutants. Furthermore, assembly/release of murine leukemia is insensitive to TSG-5'. TSG-5' is incorporated into virions, confirming the Gag/TSG101 interaction in virus-producing cells. Mutations that inactivate the p6 L domain block TSG-5' incorporation. These data demonstrate a link between the E2-like domain of TSG101 and HIV-1 L domain function, and raise the possibility that TSG101 derivatives could serve as potent and specific inhibitors of HIV-1 replication by blocking virus budding. To elucidate the role of TSG101 in HIV-1 budding, we evaluated the significance of the binding between Gag and TSG-5' on the inhibition of HIV-1 release. We observed that a mutation in TSG-5' that disrupts the Gag/TSG101 interaction suppresses the ability of TSG-5' to inhibit HIV-1 release. We also determined the effect of overexpressing a panel of truncated TSG101 derivatives and full-length TSG101 (TSG-F) on virus budding. Overexpressing TSG-F inhibits HIV-1 budding; however, the effect of TSG-F on virus release does not require Gag binding. Furthermore, overexpression of the C-terminal portion of TSG101 (TSG-3') potently inhibits budding of not only HIV-1 but also murine leukemia virus. Confocal microscopy data indicate that TSG-F and TSG-3' overexpression induces an aberrant endosome phenotype; this defect is dependent upon the C-terminal, Vps-28-binding domain of TSG101. We propose that TSG-5' suppresses HIV-1 release by binding PTAP and blocking HIV-1 L domain function, whereas overexpressing TSG-F or TSG-3' globally inhibits virus release by disrupting the cellular endosomal sorting machinery (Goila-Gaur 2003). To define further the mechanism of action of budding inhibitors and more completely understand the interplay between cellular host factors and retroviral L domains, we utilized equine infectious anemia virus (EIAV) clones containing native (YPDL) or heterologous (PPPY or PTAP) L domains. We tested the ability of TSG-5', TSG-3', and full-length TSG101 (TSG-F) overexpression, a dominant negative form of the AAA ATPase Vps4 (Vps4EQ), and proteasome inhibitors to disrupt the budding of EIAV particles bearing these three types of L domains. The results indicate that: 1) inhibition by TSG-5' correlates with dependence on PTAP, 2) the release of WT EIAV is insensitive to TSG-3' whereas this C-terminal TSG101 fragment potently impairs the budding of EIAV when it is rendered PTAP- or PPPY-dependent, 3) budding of all EIAV clones is blocked by Vps4EQ, 4) WT EIAV release is not impaired by proteasome inhibitors while EIAV-PTAP and EIAV-PPPY release is strongly disrupted by these compounds. These findings highlight intriguing similarities and differences in host factor utilization by retroviral L domains, and indicate that insensitivity of EIAV to proteasome inhibitors is conferred by the L domain itself and not by determinants in Gag outside the L domain (Shehu-Xhilaga submitted). New HIV-1 therapies are urgently needed to address the growing problem of drug resistance. This year we characterized the anti-HIV drug candidate 3-O-(3',3'-dimethylsuccinyl) betulinic acid (PA-457). We found that PA-457 potently inhibits replication of both WT and drug-resistant HIV-1 isolates and that the compound acts by disrupting a late step in Gag processing involving conversion of the capsid precursor (p25) to mature capsid protein (p24). We find that virions from PA-457-treated cultures are non-infectious and exhibit an aberrant particle morphology characterized by a spherical, acentric core and a crescent-shaped, electron-dense shell lying just inside the viral membrane. Consistent with the effect on Gag processing, we demonstrated that passaging of WT HIV-1 in the presence of the compound generates a PA-457-resistant virus encoding a single amino acid substitution at the p25 to p24 cleavage site. PA-457 represents a novel class of anti-HIV compounds termed maturation inhibitors that exploit a newly identified viral target.